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home / study / business / accounting / accounting questions and answers / can anyone help me with this? 1. the capital provided by common shareholders during the period ...
Question: Can anyone help me with this? 1. The capital provided by common shareholders during t...
can anyone help me with this?
1. The capital provided by common shareholders during the period used for calculating the return on common equity equals
a. | the average par value of common stock, capital contributed in excess of par value on common stock, retained earnings, and any other common shareholders equity accounts for the period. |
b. | average preferred shareholders equity less average total shareholders equity. |
c. | the ending par value of common stock, capital contributed in excess of par value on common stock, retained earnings, and any other common shareholders equity accounts for the period. |
d. | ending preferred shareholders equity less ending total shareholders equity. |
e. | choices a and b |
2. The term _____ describes financing with debt and preferred stock to increase the potential return to the residual common shareholders equity.
a. | trading on the debt |
b. | trading on the equity |
c. | financial leverage |
d. | equity financing |
e. | none of the above |
38. Igor Corporation's accounts receivable, net of allowance for uncollectibles, were $250,000 at December 31, Year 3, and $350,000 at December 31, Year 4. Net cash sales for Year 4 were $300,000. The accounts receivable turnover was 6.0. Igor's net sales for Year 4 were
a. | $1,500,000 |
b. | $1,800,000 |
c. | $2,000,000 |
d. | $2,100,000 |
e. | $2,200,000 |
3. During Year 2, Lamar Corporation purchased $600,000 of merchandise inventory. The cost of sales for year 2 was $660,000 and the ending merchandise inventory at December 31, Year 2 was $60,000. What was the inventory turnover for Year 2?
a. | 8.0 |
b. | 7.3 |
c. | 6.6 |
d. | 6.0 |
e. | 6.7 |
4. Selected data from Carson Corporation's financial statements for the year ended December 31, Year 2 are as follows.
Current ratio | 1.4 |
Quick ratio | 0.86 |
Current liabilities | $450,000 |
Accounts receivable turnover | 6.0 |
Merchandise inventory turnover | 4.0 |
Rate of return on assets | 6.5% |
Selected Account Balances at December 31, Year 1:
Accounts receivable | $355,000 |
Merchandise inventory | 190,000 |
Year 2 Operations
Sales | $1,241,000 |
Cost of goods sold | 800,000 |
Assuming that prepaid expenses are immaterial, ending merchandise inventory at December 31, Year 2 is
a. | $180,000 |
b. | $210,000 |
c. | $220,000 |
d. | $240,000 |
e. | $260,000 |
King Products Corporation
King Products Corporation
Statement of Financial Position
(in thousands)
June 30 | ||
Year 6 | Year 5 | |
Cash | $ 60 | $ 50 |
Marketable securities (at market) | 40 | 30 |
Accounts receivable (net) | 90 | 60 |
Inventories (at lower of cost or market) | 120 | 100 |
Prepaid items | 30 | 40 |
Total current assets | $ 340 | $280 |
Long-term investments (at cost) | 50 | 40 |
Land (at cost) | 150 | 150 |
Building (net) | 160 | 180 |
Equipment (net) | 190 | 200 |
Patents (net) | 70 | 34 |
Goodwill (net) | 40 | 26 |
Total long-term assets | $ 660 | $630 |
Total assets | $1,000 | $910 |
Notes payable | $ 46 | $ 24 |
Accounts payable | 94 | 56 |
Accrued interest | 30 | 30 |
Total current liabilities | $ 170 | $110 |
Notes payable, 10% due 12/31/Year 12 | 20 | 20 |
Bonds payable, 12% due 6/30/Year 15 | 30 | 30 |
Total long-term debt | $ 50 | $ 50 |
Total liabilities | $ 220 | $160 |
Preferred stock-5% cumulative, $100 par, non-participating, authorized, issued and outstanding, 2,000 shares | 200 | 200 |
Common stock-$10 par, 40,000 shares authorized, 30,000 shares issued and outstanding | 300 | 300 |
Additional paid-in capital--common | 150 | 150 |
Retained earnings | 130 | 100 |
Total shareholders' equity | $ 780 | $750 |
Total liabilities and shareholders' equity | $1,000 | $910 |
King Products Corporation Income Statement For the year ended June 30 (in thousands) | |
Year 6 | |
Net sales | $600 |
Costs and expenses | |
Cost of goods sold | 440 |
Selling, general, and administrative | 60 |
Interest expense | 10 |
Income before taxes | $ 90 |
Income taxes | 45 |
Net income | $ 45 |
5. Refer to the King Products Corporation example. King Products Corporation's inventory turnover for the fiscal year ended at June 30, Year 6, was
a. | 3.7 |
b. | 4.0 |
c. | 4.4 |
d. | 5.0 |
e. | none of the above |
6. Refer to the King Products Corporation example. King Products Corporation's accounts receivable turnover for the fiscal year ended at June 30, Year 6, was
a. | 4.9 |
b. | 5.9 |
c. | 6.7 |
d. | 8.0 |
e. | none of the above |
7. Refer to the King Products Corporation example. King Products Corporation's average collection period for the fiscal year ended at June 30, Year 6, using a 360-day year, was.
a. | 36 days |
b. | 45 days |
c. | 54 days |
d. | 61 days |
e. | none of the above |
8. Refer to the King Products Corporation example. King Products Corporation's quick (acid test) ratio at June 30, Year 6, was
a. | 0.6 |
b. | 1.1 |
c. | 1.8 |
d. | 2.0 |
e. | none of the above |
9. The traditional use of the term _____ financial statements refers to projected financial statements based on some set of assumptions about the future. One set of assumptions might be that historical patterns (for example, growth rates or rates of return) will continue.
a. | what-if |
b. | estimated |
c. | Planned |
d. | pro forma |
e. | Future |
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